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A sneeze there and a cold here!

For the first time since November 1998, the technology stock index Nasdaq has plummeted to new depths bringing with it the dreams of many investors and subsequent fear of a backlash in the Indian IT sector. Everyday one reads different reports of how manpower consultants who used to charge their US clients $80 an hour cannot ask beyond $20 now for the same set of skills, how Indian websites are flooded with resumes of those seeking employment in their home country, and how salaries and fancy perks in the software sector are coming to realistic levels.

In this bleak scenario, a survey conducted by the Confederation of Indian Industry (CII) offers a silver lining for the beleaguered IT sector. The survey points out that the usage of information technology among the domestic small and medium enterprises has risen compared to the previous years. The survey involved respondents from all over the country, covering a broad spectrum of industry groups. What are the benefits they have got from increased IT usage? Faster execution, better customer service, increased productivity, improved quality and better relationship with partners were the key benefits.

Having categorized the usage of IT in an organization into heavy, medium and light, CII notes that the heavy use is in the areas of finance, sales, marketing and corporate. The medium usage is the in areas of research and development, distribution and logistics while light usage is in the areas of human resource development, administration and manufacturing.

This study should serve as an eye-opener to the information technology sector in the country, which has always ignored SMEs in favor of large corporates, governments, and export orders. It could well turn into a golden opportunity for our domestic software industry to build cost-effective, easy-to-use products and solutions to cater to this sector, which is bound to grow in the years to come.

Since the level of computerization in the SME segment is limited, there is only one way in which it can grow and that is upwards. Coupled with the boom in Internet usage, which would ride on the broadband infrastructure, the domestic market prospects sound good for both the IT and communications industries. If the focus shifts inward, the country need not catch a cold each time US sneezes.

However, the growth of the PC industry is not something to gloat about. The total number of shipments was estimated to be 1.7 million in the year 2000 compared to 1.02 million in 1999, registering a growth of 67 per cent in terms of volume. The installed base has gone up to 5.7 million compared to four million last year. If this trend continues through the course of the current year, it would augur well for the IT industry. What could ultimately fuel the boom in the consumer segment is a further slash in prices-say, up to Rs 20,000 for a good PC. Of course, with a monitor!

Talking of technology options for building both corporate networks and connecting to the Internet, Frame Relay is now coming up as an effective choice. Although Indian corporates have largely chosen dedicated leased line circuits over other technologies such as X.25 and ATM, Frame Relay is also being considered actively these days.

Our focus feature as usual highlights what are the technological benefits of Frame Relay, why it is suited for both domestic and international connectivity and how does it compare with other technologies.

Incidentally, I have decided to hand over the baton of editorship of Network Magazine which started off as LAN Magazine (Indian Edition) in November 1998 and was later rechristened Network Magazine last May. Dear readers, I take this opportunity to thank each of one you for the consistent support and regular feedback without which it would have been difficult for me to steer the magazine forward. Once again my heartfelt thanks to one and all.

Aparna Achar
achar@vsnl.com